OBTAINER - QNET

Mandatory Pension Insurance
for the Self-Employed
Is It Causing Panic
or Will It Soon
Be Reality?
Currently the rumor mill is seething. Particularly on the
Internet there are news messages circulating about a
comprehensive reform of old age security which state
that, already in the coming year, it will be mandatory for the
self-employed. Consequently this would mean major changes
for the currently 3 million self-employed individuals in Germany
and especially for sales distributors and direct sales distribution
companies. This could, in accordance with such legislation,
require that compulsory charges be placed on their commissions
which will then be paid to the old age security pension fund; - the
mandatory contribution for the statutory pension insurance is
currently 19.9 % of gross income. In other words: If one gives
credit to the rumors then distributors, in the future, will have
almost 20% less income, which is especially detrimental to those
distributors which generate low additional income from their
self-employment activities. There is also talk of a mandatory
payment of € 400.00 per month - regardless of income earned.
If one adds the considerable contribution for health insurance
then this means that monthly fixed costs will be in the vicinity
of € 600.00 per month for self-employed individuals; this is
already a considerable expense for health and old age security
alone which, of course, needs to be earned in the first place.
Such high fixed costs not only threaten the existence of small
business owners and those that are still in the start-up phases
of the business, but also increase, at the same time, the entry
barriers to becoming self-employed. In addition, the form of this
type of private pension will be greatly limited, so that the chosen
BACKGROUND
old age insurance is neither inheritable nor transferable, it cannot
be used as collateral, be sold or be capitalized on;- the retirement
provision must be paid out as retirement income. Alternative
forms of retirement provisions, e.g. real estate or other forms of
capital investments are not acceptable.
The reason for the introduction of the mandatory old age security
reform is to prevent self-employed individuals from being
impoverished in their old age; such possibility exists even though
there are no studies available confirming such a threat. Moreover,
it is being stated that mandatory old age security insurance for the
self-employed already exists in other countries and this German
adaptation of the law satisfies international legal requirements.
We at OBTAINER want to research these rumors and inform
you, as accurately as possible, about the supposed imminent
mandatory pension reform for self-employed individuals. Is it
merely about half-truths and scare tactics or are there basic truths
to the rumors? We have talked about this subject with an Advisor
of the north German old age security system and have received
a fact sheet from the Federal Ministry of Labor and Social Affair
(BMAS) in which the most important aspects of the upcoming
adaption of the pension reforms are summarized.
And so the cat is already out of the bag. Yes - it is currently being
discussed and debated in what form the self-employed will be
required to save for their old age! "In the future all persons that
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